Education, education, education

We appear to be past the peak of the pandemic in the UK now, and as our thoughts turn to the ‘new normal’ we must start to think about what we’ve learned from this experience and how we can ensure that we are better prepared for next time, both as an industry, and as consumers.

What is the point?

One question many customers will surely be asking is, what is the value of my insurance policy? With Alex reporting last week that Tesla is turning to self-insurance for its D&O exposures, and yet more class action groups being formed to tackle claim declinatures, have we lost faith in insurers to protect us when the worst happens?

Not according to a report published in Insurance Times on Tuesday by the Capgemini Research Institute, which cited a 10% increase in the number of consumers looking to buy insurance.  Good news for a sector that has faced its fair share of challenges over the past couple of months.

Capgemini suggest this increase provides an opportunity for insurers to reflect on current events and develop offerings that demonstrate even greater value for consumers. 

I think it’s fair to say that the current situation and the well-publicised challenges over the clarity and application of policy wordings could well lead to the evolution of an even more savvy insurance consumer, conscious of the need for cover but wary of potential gaps and ambiguities that could lead to difficulties down the line.

The next pandemic?

Writing in Canadian Underwriter, Phillip Cook, the chairman of Omega Insurance Holdings speculated on this theme with a cautionary tale on dangers of a ‘pandemic of litigation’.

Barely a day goes by without a detailed analysis of a different insurer’s policy wordings and a commentary on how they could (or should) be applied to individual claims, and debates over the intentions of these policies. And this isn’t just in our industry press, this is of international interest.

In his article, Cook argues that with more people at home reading these stories and following these arguments with interest, there will be a greater chance of an increase in litigation based on some of the arguments over policy wordings that we’re seeing now.  However, he cautions that we must be wary about how we present these articles and debates; the findings that may be applicable to one circumstance will not be relevant for all.

The broker role

And finally on the theme of clarity and the nuances of policy terms, in a write-up of Insurance Journal’s 8th April webinar on business interruption and the coronavirus published yesterday, broker participants stressed the need for transparency when dealing with customers who may be unsure whether their claim will be covered.

It is the broker’s role to guide and to educate their customers throughout the life of their policy, and to help them to understand the limits of their cover and what might happen if they are to make a claim.  Key to this role is honest and open communication, as one broker states in the article; “it is important to be honest with clients about the scope of their business interruption policy and the likelihood of their claim being denied.”

So, what are we learning from this?

This year’s pandemic has undoubtedly signalled a major turning point in how we live, work and adapt to crises, and according to an article in Commercial Risk Africa, could provide us with the opportunity to prepare for an even bigger looming crisis… climate change.

The global lockdown may have offered the planet a chance to recover slightly, but we mustn’t ignore the very real threat of climate change. The Economic Commission for Africa, ACPC reports that the way Governments and people have joined together to deal with the pandemic could pave the way in helping us to shape our response to climate change, citing the solidarity between countries and communities, the data sharing and cross-border support.

With thanks to Insurance Times, Canadian Underwriter, Insurance Journal and Commercial Risk.